Market report: Thursday close

THE underwriters of Kingfisher's £2bn rights issue will have slept better during the past few days as the retailer's share price continues to make up lost ground.

The price rallied a further 1/4p to 193 3/4p as more than 55m shares changed hands ahead of Friday's closing date for the one-for-one issue at 155p, which has been underwritten by UBS Warburg, Goldman Sachs and Credit Suisse First Boston.

HSBC Securities has published a timely 'buy' recommendation on the shares. It says suggestions that most of the issue will be left with the underwriters, and the likelihood that it is paying too much for the rest of its French arm Castorama, mean the stock has underperformed the rest of the market by 10% in the past month.

The broker reckons that on a price-earnings multiple of 11 to December 2003, the execution risks Kingfisher faces over the next 12 to 18 months seem fully discounted. It has put a sum-of-the-parts valuation on the business of 270p and a 12-month target price of 240p.

At the same time, engineer Cookson rallied 5 1/4p to 27 1/2p, matching the terms of its £270m rescue rights issue. But the Cookson fund-raising exercise is not underwritten and its advisers will have to pedal a bit harder to persuade the institutions to support it.

Share prices generally beat a ragged retreat despite the decision of the Bank of England monetary policy committee and the European Central Bank to peg rates. Another set of abysmal economic numbers from the US saw the Dow tumble this afternoon. That also left the FTSE 100 nursing a fall of 201.7 at 4044.5.

Barclays fell 42p to 447p after reporting a dip in half-year profits and warning that market conditions remain challenging. Chief executive Matt Barrett declined to comment on recent speculation that the bank wanted to bid for mortgage lender Bradford & Bingley, down 6p at 321p. The results dampened the rest of the sector, HBOS down 25p at 695p, Lloyds TSB 53 1/2p at 586p and Royal Bank of Scotland 155p at 1525p.

Brokers gave the thumbs-down to interim results from chemicals giant ICI, down 20 1/2p at 280p. Pre-tax profits before exceptionals were static at £125m. Results out today from German rival Bayer also left a sour taste.

Broker Credit Suisse First Boston has issued its clients with a list of the top global consumer companies they should add to their portfolios. They include tobacco giant BAT, 14p weaker at 705p, drinks and food group Diageo, down 39p at 737p, and the Swiss food group Nestlé.

Interim results from insurance giant Aviva, up 40p at 465p, cheered investors. Brokers were reassured by its performance and the strength of its balance sheet, despite the company's claim that second-half trading remained challenging.

Scottish Radio hit a new low with a fall of 13p to 693 1/2p with a big seller continuing to overhang the market.

Virt-x, the pan-European share trading system, says business is booming. Last month it processed a record number of trades totalling more than a million with a value of e65.6bn (£41bn). Chief executive Antoinette Hunziker-Ebneter said that during July the company processed between 40,000 and 70,000 order book trades a day. Virt-x's shares are quoted on AIM, where they rose 1 1/2p to 36 1/2p.

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